Quick overview
- Investment firms anticipate significant upside for ConocoPhillips (COP) following a 4.69% stock increase due to Middle East tensions.
- Morgan Stanley has adjusted its price target for ConocoPhillips to $146, indicating a potential 33% upside from its current trading price of $109.
- The energy sector, including ConocoPhillips, ExxonMobil, and Chevron, has seen substantial gains amid rising crude oil prices driven by U.S.-Iran military actions.
- Crude oil prices have surged, with WTI reaching $75.34 per barrel and Brent at $77.62, as global oil supplies face potential disruptions.
Investment firms expect a strong upside for ConocoPhillips (COP), but they may reassess with even higher expectations after Middle East conflict pushed the stock 4.69% higher on Tuesday.
Early trading for Wednesday saw energy stocks continue their strong Tuesday afternoon gains. ConocoPhillips was one of the strongest gainers with 0.65% increase after gains of nearly 4.7% the previous day. The E&P (gas exploration and production) giant saw its stock value lifted along with the rest of the energy sector this week as Iran and the United States exchanged fire once more.
Morgan Stanly expects ConocoPhillips stock to hit $146, and they recently lowered that target price from $153. Currently, the stock trades at $109, so the firm anticipates a tremendous upside that is around 33%. As current levels are rapidly rising, though, the price target could be updated again.
Energy Stocks Climb on Iran/U.S. Troubles
Crude oil prices fell in recent weeks but then surged on Tuesday after President Trump ordered military strikes on Iranian targets. Those strikes were sent in retaliation for Iranian military attacks on vessels around the Strait of Hormuz, which Trump says violates the ceasefire agreement.
ConocoPhillips is only one of a number of energy stocks that experienced dramatic gains this week. ExxonMobil (XOM) added 3.5%, and Chevron (CVX) gained 3.5% as well. Both of these stocks held onto their gains on Wednesday in early trading, with Chevron adding another 1.35%.
So long as the two countries engage in military action, oil supplies around the world are in jeopardy. Strikes from the two countries have impacted shipments of oil as well as oil fields and production facilities. Suppliers are raising prices to compensate, expecting delayed shipments and limited availability of gas and oil. Even in areas not directly impacted by the conflict, oil supplies are likely to decrease as exports to affected areas increase.
The price of WTI crude oil is up by 7% for Wednesday, hitting $75.34 per barrel. The price of Brent crude oil is likewise sky high, climbing 5% to achieve $77.62 per barrel. As prices soar, energy stocks are rising as well, but if the conflict ends, those prices should start to stabilize.
Timothy St. John
Financial Writer – European & US Desks
www.fxleaders.com